2014 VA Loan Funding Fee and VA Loan PMI Fees

VA Home Loans are one of the best mortgage loan programs available. For Veterans who are buying a home in NC valued at less than $417,000 there’s no down payment required, and the Seller or Builder can pay most, if not all of your closing costs. The 2014 VA Loan Funding Fee is also incredibly low!

The Veteran’s Administration doesn’t actually make mortgage loans, they insure them. Because the US Government is “backing” your VA Loan, the mortgage interest rates are normally much more favorable than those for other loan types. Additionally, the 2014 VA Loan Funding Fees (which is the VA Loan version of PMI) are extremely low.

It’s important to remember that even though the Veteran is eligible for a VA Home Loan, the Veteran still must “qualify” for the mortgage loan.

Qualifying for a VA Loan is fairly straight forward, the minimum credit score requirements for VA Loans is actually not published by VA. In other words, they don’t really have a minimum credit score requirement – however, most banks we sell loans to require a minimum credit score of at least 620 to be eligible for a VA Loan.

For those who suffered a foreclosure or Short Sale, you can apply for a VA Loan 24 months after the transfer of title. If the previous loan was a VA Loan – you will likely be required to make the VA “Whole” before closing on a new VA Loan.

2014 VA Loan Funding Fee and VA Loan PMI Fees

The fees charged by the VA to cover the cost of insuring VA Loans is called a Funding Fee. It’s the VA Loan PMI fee. The VA Loan fees vary based upon the Veteran’s use of the program (first time VA Loan Users get a break), down payment and Military Service.

The VA Loan PMI charges are based upon the Loan amount, and the Veteran generally adds the PMI fees to the loan, although it can be paid in full at closing by the Veteran or the Seller. There are no monthly PMI fees charged by the VA, unlike FHA PMI or Conventional Loans – which can add over $200 a month to the payment!

VA Loans do have a Funding fee that will be charged as follows until September 30, 2016:

Sheet1

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VA Funding Fee For Purchase Transactions

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Type of Veteran

Downpayment

1st Time Use

Subsequent Use

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Regular Military

None

2.15%

3.3%

.

5% to 10%

1.5%

1.5%

.

10% or More

1.25%

1.25%

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.

Reserves / National Guard

None

2.4%

3.3%

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5% to 10%

1.75%

1.75%

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10% or More

1.5%

1.5%

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.

To Calculate the Funding Fee, Multiply the Percentage Charged by the Loan Amount. Example: $100,000 mortgage, 1st Time Use with no Down Payment would be $2150. This is typically added to the Loan Amount, making the total loan in our Example $102,150

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VA Funding Fee For Cash-Out Refinance

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Type of Veteran

1st Time Use

Subsequent Use

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Regular Military

2.15%

3.3%

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.

Reserves / National Guard

2.4%

3.3%

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.

There is no reduced funding fees for regular refinances based on Equity. Reduced fees only apply to purchase loans where a down payment of at least 5% is made. If you currently have another type of financing on your home, and you want to take Cash Out of the home with a VA Home Loan – that's perfectly okay. You do not need to currently have a VA Loan to finance INTO a VA Home Loan.

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VA Funding Fee For Other Transactions

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Type of Loan

Percentage Charged for Either Type of Veteran Whether First Time Use or Subsequent Use

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IRRRLs / Interest Rate Reduction Refinance (no Cash Out)

0.5%

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Loan Assumptions

0.5%

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Manufactured Home Loans (not permanently affixed)

1%

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Higher Subsequent use fees do NOT apply if the Veteran's ONLY prior use of entitlement was for a manufactured home loan.

As the table points out, there is a slight difference in the VA Funding Fee depending on whether you were active duty or spent time in the Reserves/National Guard. Those Veterans that are considered by the Veteran’s Administration to be eligible, will not be charged a Funding Fee, or might be charged one at a discounted rate based upon the percentage of Veteran disability determined by the Veteran’s Administration.

If you have questions about 2014 VA Loan Funding Fee or VA Loan PMI Fees, please contact Steve and Eleanor Thorne 919-649-5058. We can help you with a Streamline refinance, or a purchase using your VA Home Loan Benefits.

About Eleanor Thorne

I see myself differently than most loan officers in the Cary/Raleigh market. As a rare Cary native, I see myself as an expert on the area, on mortgage industry changes & factors that effect rates! I’ve lived in Cary since 1968 – and I’m second generation “mortgage.” I work with my husband, Steve Thorne Mortgage Loan Originator #60596 Equal Housing Lender